AFP reports citing authorities.
A fuel tanker is suspected of having dumped half a million litres of diesel into the country's busiest waterway on Thursday, said coast guard environmental protection chief Commodore Joel Garcia.
"I cannot say that we have contained it because it has affected so wide an area," he told reporters.
"There have been reports of cases of people going to hospital from difficulty of breathing due to the fumes coming from this oil."
Oil containment booms were deployed while government experts are checking the impact on marine life, Garcia said.
The 300-square-kilometre (120-square-mile) slick was drifting toward the mouth of the bay Friday, Garcia said.
About 20 kilometres (12 miles) of coastline near the capital Manila has been affected, he added.
Asis Perez, head of the fisheries and aquatic resources bureau, said he has banned the harvesting and sale of shellfish from these areas until further notice.
"Fuel should not be ingested by people," Perez said in an interview over radio station DZBB.
Garcia said the coast guard decided not to use chemical dispersants as they would poison the water, opting to let the fuel evaporate. He could not say how long this would take.
The 34,000-barrel-capacity M/T Makisig and its crew have been detained and its owners will be made to pay for the clean-up if it were proven that it indeed had caused the spill, he added.
Additionally, the crew could face criminal charges unless there were "mitigating circumstances" that led to the release of the fuel into the water.
"Fuel samples taken from the shoreline and from the ship are quite identical," he said.
The tanker's owners, Herma Shipping and Transport Corp, could not be reached for comment on Friday.
The tanker had earlier unloaded fuel at a Petron terminal in the town of Rosario near Manila, the oil refiner said in a statement.
"According to initial information, the leak may have come from the vessel but this will have to be investigated further," it said in a statement, adding its pipeline was intact.
"Diesel is not a persistent oil and will easily disperse, so there is no danger to the environment and the local community," it added.